SNC-Lavalin signs contract with Chilean mining company
Pedestrians walk past the offices of SNC Lavalin in Montreal. (Ryan Remiorz / THE CANADIAN PRESS)
Published Tuesday, September 4, 2012 3:18PM EDT
MONTREAL -- SNC-Lavalin (TSX:SNC) has signed a management and engineering contract with Chilean miner Minera Antucoya SA, a subsidiary of Antofagasta Minerals SA.
The agreement, which was made for an undisclosed amount, covers work at the Antucoya project in Chile, outside Antofagasta.
Antucoya will produce about 80,000 tonnes of copper annually, according to the company's estimates.
The project also includes processing facilities that employ crushing, leaching, solvent extraction and electrowinning technologies.
Under the contract, SNC will integrate four process packages from other companies, as well as manage construction roads, camps, utilities, power distribution and other key infrastructure elements.
Engineering at the project will begin immediately while a targeted competition date is set for the third quarter of 2014.
An estimate from Desjardins analyst Pierre Lacroix puts the value of the contract at between $100 million and $150 million, based on the estimated US$1.7 billion in capital costs for Antofagasta.
"While (these) contracts typically represent 10 per cent of the total capital costs, the scope of work currently attributable to SNC may not encompass the full project," Lacroix wrote.
"Nevertheless, the project would be an incremental addition to the C$2.3b backlog of service contracts held by SNC at the end of the second quarter of 2012."